Hydrogen is working and it’s much cheaper than we thought

The technology that produces hydrogen using renewable electricity has already passed crucial regulatory tests for grid balancing in a commercial environment, despite what I said here a month ago.

For over 30 years the prophets of green energy have been promoting the idea that the “hydrogen age” is just around the corner. The gas is abundant in the form of water, molecules of which possess two hydrogen atoms for every oxygen atom.

Making it from water using electrolysis releases only oxygen and no pollutants. It can then be burnt in any suitable boiler, cooker or vehicle and used in fuel cells. All we have to do is get it to the right place at the right time at the right price.

The problem has always been the right price, which provides the market incentive for investment in the necessary infrastructure.

A month ago I wrote a piece on a proposal to convert the UK’s gas grid to hydrogen. The reports I covered judged that the most likely route to creating the hydrogen was through the steam reforming of methane. This is not a climate friendly way of doing it, although it is currently by far the most common.

In a low carbon future, producing hydrogen this way in the required quantities would be unlikely without the ability to capture the carbon released by this process and store it underground, a relatively unproven and expensive process dubbed Carbon Capture and Storage.

I had compared in my article the cost of steam reforming with CCS with the cost of producing hydrogen by the electrolysis of water using wind or solar power. My source for the latter information was an apparently reliable one: the Energy Institute of University College London, which produced a report in April last year authored by Samuel L Weeks about using hydrogen as a fuel source in internal combustion engines. This states: “Hydrogen produced by electrolysis of water is extremely expensive, around US$1500/kWh [AU$1959/kWh].

The editor of The Ecologist magazine, Oliver Tickell, pulled me up on this, observing that it struck him as being way too expensive. I tried to get Professor Weeks and the UCL Energy Institute to give me the source for the $1500 figure but so far have not had a response.

So instead I turned to a company that is already making hydrogen from renewable electricity for grid balancing and fuel cell powered cars: ITM Power. They provided me with another professor, Marcus Newborough, who is their development director. He gave me a much lower figure.

Much, much lower.

He said: “We are currently selling high purity hydrogen at our refuelling stations for fuel cell cars at £10/kg of hydrogen. Each kilogram contains 39.4kWh of energy, so that’s about 25 pence/kWh or $0.33/kWh. The ambition is to decrease the $/kWh value as more stations are manufactured and more FC cars are in circulation. So yes the $1500/kWh number looks absurd to us.”

Indeed it does. It is 4545 times larger, if we are comparing like with like.

And I apologise for not checking more thoroughly.

And I’m still mighty curious as to why UCL Energy Institute got it so wrong.

Not only is ITM using the gas for hydrogen car filling stations, a chain of which it is opening in the UK (on a full tank of hydrogen a fuel cell car can drive up to 300 miles), it is also using it to inject into the grid.

Power-to-gas

The process is called power-to-gas (P2G) and it is useful when too much renewable electricity is being produced compared to the demand that exists at that moment. Instead of it going to waste it could be used to produce hydrogen as a form of energy storage and used when required.

Professor Newborough said, “The power-to-gas approach is a form of energy storage and (in the UK) there are various assessments and discussions ongoing [through organisations such as BEIS (the new UK government department dealing with energy and industry), OFGEM (the British energy regulator), UK National Grid, DG Energy in Brussels (the European Commission’s department dealing with energy) and The European Association for Storage of Energy] but no conclusive economic framework yet for energy storage to operate within.”

He said P2G was particularly advantageous for its following abilities:

  • to respond to an instruction from the grid operator to charge up or absorb electricity
  • to hold on to the stored energy for a significant period without incurring energy losses
  • to discharge energy on demand at a desired rate
  • to be scaled up in number or capacity as we head towards a much more renewable electricity system

“P2G is part of this alongside batteries, pumped storage, etcetera,” he said. “Fundamentally the economic benefit is greatest for those technologies that possess the operational advantages of being able to respond very rapidly and/or hold onto the energy for a long period and/or discharge energy at a controllable rate across a very long period. Now power-to-gas is particularly advantageous in each of these respects.”

ITM has a pilot P2G system operational in Frankfurt with 12 other companies that together form the Thüga group.

At the end of 2013, this plant injected hydrogen for the first time into the Frankfurt gas distribution network. It therefore became the first plant to inject electrolytic generated hydrogen into the German gas distribution network, and possibly anywhere in the world. Final acceptance of the plant was achieved at the end of March 2014.

Overall efficiency is said to be over 70 per cent and the plant is now participating in Germany’s secondary control (grid balancing) market.

The conditions for being allowed to do this are extremely stringent. Systems have to respond in under one second when they receive a command to increase to maximum power or decrease to zero power to demonstrate that they are suitable for frequency regulation. The energy is discharged as hydrogen and should be available for as long as required.

The Frankfurt system has been shown to do this and can react to variable loads in the network.

Work is ongoing to see how the plant can be integrated into an increasingly intelligent future energy system.

“For the duration of the demonstration, we want to integrate the plant so that it actively contributes to compensating for the differences between renewable energy generation and power consumption,” Thüga chief executive Michael Riechel said.

The regulatory framework is playing catch-up

Professor Newborough told me that the payment levels for providing such services have yet to emerge.

In the UK, the national grid is introducing an Enhanced Frequency Response service to pay energy storage technology operators to provide sub-second response.

“ITM has already pre-qualified to provide such a service,” he said.

They are also introducing a Demand Turn Up service, which will pay operators £60/MWh (AU$102/MWh) for operating overnight and on summer afternoons to absorb excess wind and solar power.

“Clearly the economics of P2G are a function of such balancing services payments from the grid operator and the electricity tariff,” he said, “but in addition P2G offers a greening agent to the gas grid operator in the form of injecting hydrogen at low concentrations into natural gas.

“So the economics are also a function of the value placed on greening up the gas grid. By analogy we have seen in recent years in France, Germany and the UK, feed-in tariffs for injecting bio-methane into the gas grid as a greening agent and these have been up to four times the value of a kWh of natural gas.

“The economic case therefore depends on a combination of value propositions and costs – providing services to the electricity grid, the electricity tariff paid, the value of green gas for the gas grid and the capital cost of the plant. In this context it is not possible to state firm figures at this time, but equally it is important to state the underpinning factors as described above.”

It was at this point in our conversation that he gave me the price at which the company is currently selling high purity hydrogen at its fuel cell car refuelling stations.

Advantages of hydrogen over batteries

A report on energy storage undertaken by McKinsey and Co last year found that using variable renewable electricity this way could use nearly all excess renewable energy in a scenario in the future in which there was a high installed capacity of renewable electricity generation.

Reusing this stored energy in the gas grid, for transport or in industry, it said, would provide a valuable contribution to decarbonising these sectors. The European potential, in 2050, of this value would be “in the hundreds of gigawatts”.

That’s massive.

This future scenario, in which countries are reliant for much of the electricity on renewables, is likely to be common.

The Kinsey report contrasts the use of hydrogen with the use of batteries, which it calls power-to-power or P2P because it’s electricity rather than gas that comes out.

In this situation hydrogen scores better as a storage medium because batteries can either be emptied (in which case they can’t supply the demand) or full (in which case they can not be charged even if the generator is generating). By contrast, hydrogen can continue to be pumped into the grid or into vehicles and the limiting factor instead is the limit of local demand for the distance to the demand from the generator. This is shown in the following diagram:

How low energy storage capacity is a limiting factor for the use of batteries.

How low energy storage capacity is a limiting factor for the use of batteries.

Nevertheless the Kinsey report warns that current regulations lag behind the potential of these technologies. Reviewing them is the key to unlocking this enormous opportunity.

So it now seems that the most likely route to creating the hydrogen that goes into our gas grids could be from electrolysis using renewables after all.

Yet, like many cutting-edge low carbon technologies, it’s early days. The Germans are pioneering this method as part of their transition strategy. It’s one part of the picture.

With the UK Met office this week saying that we have already reached 1.38°C temperature rise since the beginning of the industrial revolution and the Paris Agreement aspiring to keeping that rise to 1.5°C, the task of mainstreaming these technologies becomes even more urgent.

David Thorpe is the author of:

Comments

3 Responses to “Hydrogen is working and it’s much cheaper than we thought”

  • Keith Ross says:

    A point of scientific accuracy: Energy is stored by keeping Hydrogen and oxygen apart. Hydrogen itself is a stable gas, but oxygen is made of weakly bonded molecules which are extremely reactive. We tend to ignore the role played by oxygen because it is readily available (except high up in mountains or under water when we take it with us). Hydrogen and methane, both stable unreactive molecules, are fuels which react with oxygen, sometimes violently, to release energy stored because oxygen had been dragged away from the original oxides, either by photosynthesis or by electrolysis. We need to avoid saying hydrogen (or any other fuel) ‘contains’ energy or ‘is’ energy – say they are fuels which react with oxygen transferring the energy stored in the system.

    • Tina Perinotto says:

      OK it would be good to get more input on this. Maybe from the young PhD candidate who approached me after the Unsyd talk a couple of months back… Hi there…!

  • Michael Barnard says:

    This is good to see, but there are a couple of provisos that reduce the likelihood that this will turn into anything that is a significant contributor.

    First is that hydrogen fuel cells versus electric cars is a mostly settled debate now. In the 2000s sufficient investigation was done into both that apples-to-apples real-world comparisons could be made. Hydrogen fuel cell vehicles outside of niches and the interesting cultural example of Japan are an abandoned stream of exploration. The combination of challenges related to them are myriad from distribution, pressurizing pumps, loss of hydrogen and poorer performance characteristics in cars. The round trip ‘well-to-wheel’ efficiency for hydrogen from electrolysis through pumps into fuel cell vehicles is very poor compared to battery electric vehicles. This thread of exploration is dying out globally. Batteries won on this front.

    The second is that hydrogen distributed through pipelines is only viable with the referenced very small additions to natural gas. Hydrogen is too slippery a molecule and too corrosive to be used in existing pipelines directly. All that they are demonstrating is a slight reduction in the greenhouse gas emissions of methane gas generation plants and other uses such as domestic stoves and furnaces with the infusion of relatively expensive hydrogen. This merely increases the duration of use of methane gas instead of displacing the methane generation plants with renewables and the appliances with electric ones. Hydrogen distribution pipelines would be a prohibitively large investment with little payoff compared to simply taking advantage of the existing electrical distribution network.

    It’s worth calling out that point on methane generation. Every utility study in every country has shown that a MWH of renewable generation displaces a MWH of fossil fuel generation. The displacement with all ancillary services baked in is in the range of 99% of CO2 emissions. Infusing methane generation plants with renewable generated hydrogen is much less efficient than merely lowering capacity of the methane generation plant, using the renewable energy directly and not going through the intermediary step. In other words, this is like carbon capture and sequestration, a bandage on fossil fuel use and at best a niche model, not a viable solution in any longer duration.

    Energy storage is interesting, but if you eliminate hydrogen fuel cell cars in any quantities and eliminate the lossy use of hydrogen in methane generation plants, then the capacity to soak up peak renewable power that is unwanted is massively diminished. This is not the problem that it is made out to be regardless, as continent-scale grids exist on most developed continents, are being built in the developing continents and at that scale the variability is much more manageable. Use of existing major remote dams for passive storage will be combined with demand management through market mechanisms in most places. Solar and wind are both trivial to turn down if they are over generating and cheap to overbuild as every form of existing generation has seen as well. Wind energy is already being used as fast-reacting backup in a couple of jurisdictions because it’s so easy to slightly feather it through pitch control remotely. Most of the storage assessments that project massive needs have tight geographical constraints and don’t take these factors into account.

    So demand for storage will be lower, there will be a lot of excess generation available at any time and there will be relatively few times when it makes a lot of sense to generate electricity, turn it into hydrogen and store it. Compared to other energy storage alternatives, this is a niche play.

    Direct storage and return via fuel cells has the same well-to-wheels efficiency problems as hydrogen fuel cell cars. It’s just too lossy compared to other technologies and too expensive compared to overbuilding. I’m sure that it will exist and be used, but in specific niches where its characteristics make it uniquely qualified, not generally.

    Your contact at ITM, in other words, painted a very rosy picture which left out a couple of key points and did not provide a systemic view of the energy ecosystem that is emerging. They are a technology in search of a problem to solve, not a strong solution.

    Hydrogen is kind of like hemp. It’s amazing what you can do with it, but there’s almost always a better solution to any problem that hydrogen could solve.

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